The technology surrounding web3 continues to create headlines and attract attention. As companies rush to embrace the opportunity, billions worth of capital is flowing into the web3 domain. Last year, web3 startups raised more than $7 billion in investment despite bear market conditions.

With the staggering amount of funding available, developers get the necessary resources to build with web3. But that also allows illicit activities and bad actors to capitalize on cash flow.

So the question that arises is: is web3 secure?

Doubts about the security of web3

The fundamental idea behind web3 is to return control to the user. That conflicts with security. People make mistakes (human error); therefore, in the traditional world, one aims to build systems, and a good example is the banking system. Several institutions enforce 2FA.

Even if the bad actors somehow manage to retain the access codes, the bank has an anti-fraud detection system that will detect if someone other than the owner logs in or tries to access the owner’s money. Thus blocking the account. In general, there are layers of security in place to protect cash from fraudulent activity.

On the other hand, web3, which promotes ‘your keys, your coins’ and ‘your keys, your NFT’, the transactions are irreversible.

Web2 vs. Web3: Security

Usually on web2, when a platform is hacked, the worst case scenario is that people lose their personal information. Like credit card numbers, their addresses, their names are leaked on the Internet. But credit card companies can freeze your cards, issue new ones, and refund what’s stolen.

So, the hacks are temporary in nature. While web2 gets hacked a lot, those attacks are usually less severe and have fewer consequences. When web3 is hacked, thousands of people permanently lose access to their assets.

Most of the security measures come from governance, such as the implementation of 2FA and specific compliance steps. Although the whole point of web 3 is that there is no government, it is decentralized. Contrary to what security needs. A secure portal needs strict regulations and rules.

Now, crypto companies and platforms have taken steps in the past to facilitate such actions; hacks continue to make headlines. BeInCrypto contacted several security companies to shed some light on the scenario.

Web3 tricks on a streak

The Global Web3 Security & AML Report 2022, co-produced by Beosin, Buidler DAO, Legal DAO and Footprint, was shared via Twitter. According to the report, web3 witnessed more than 167 major attacks, with a total loss of $3.6 billion. This represented an increase of 47.40% from 2021.

These losses took a significant financial toll, as ten security incidents lost more than $100 million in a single attack, and losses from 21 security incidents ranged from $10 million to $100 million. Shockingly, the first half of last year alone contributed over $2 billion to hacks and exploits in web3 projects, more than all of 2021 combined.

With the increase in bad actors, web3 security companies have taken steps to help reduce or eliminate such actors. BeInCrypto listened to one of the leading web3 cybersecurity auditing companies when it officially confirmed the release of its DAO.

Measures to Correct Illicit Operations

As new projects are built within web3, most operators have considered remedies to offset potential attacks. Likewise, several security companies see an increase in the adoption trend, as was the case here.

Throughout 2022, Hacken maintained steady and rapid growth: revenue increased by 166%, 537 new customers used its services, and no smart contracts audited by the team were hacked. One of his key goals for the year was to find a way to merge the interests of Hacken shareholders and HAI holders, and the creation of hDAO marks the beginning of this journey.

The security companies established Trust Army, a public goods community for trusted Web3 that teaches security basics to those new to cryptography. Thus paving the way for a substantial transformation of society towards the first product-oriented, autonomous, highly expert and Web3-empowered cybersecurity assembly.

Overall, security plays a crucial role in the future development of web3 in 2023. Especially with different platforms supporting the domain. From gaming to music giants like Warner Music Group all joined forces to inject web3 exposure. Speaking of exposure, many employees even changed their jobs to work within web3. All the more reason to turn such an exciting and lucrative space into a safe one.

Remember: a safe space can also go hand in hand with regulators looking for opportunities to clamp down on the blockchain industry.